THE INDEPENDENT MEDICAL EXAMINATION AS A TOOL TO DEFEAT FRAUD
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IN Costa Rwagasore v. Grange Property & Casualty Insurance Co., no. 2022-CA-0413-MR, Court of Appeals of Kentucky (January 27, 2023), the insurer requested an independent medical examination (IME) of the plaintiff, Rwagasore, and the plaintiff argued that there was no good cause for an IME.
FACTS
After the insurer requested a medical examination of the claimant. Costa Rwagasore appealed an order of the Jefferson Circuit Court granting Grange Property and Casualty Insurance Company’s (Grange) request to appear for a medical examination by a physician selected as part of its investigation of Rwagasore’s insurance claim. Rwagasore argued that Grange failed to present evidence showing “good cause” in support of his petition under the provisions of Kentucky’s Motor Vehicle Repairs Act (MVRA), KRS 304.39-010 a seq. KRS 304,39-270(1).
On October 19, 2020, Rwagasore drove in Louisville. While stopped at a traffic signal, his vehicle was rear-ended by a vehicle that immediately fled the scene. The accident report prepared by an officer with the Jeffersontown Police Department indicated: “no injuries, no photos taken, and no vehicles were towed.”
Eleven days later, Rwagasore sought treatment at a medical clinic. He complained of pain in his back, chest, neck, shoulder, left knee, right leg and right foot. Ultimately, Rwagasore received extensive medical care and treatment from numerous medical providers.
In evaluating the claim, Grange suspected that the injuries allegedly sustained were not caused by the motor vehicle accident. After reviewing records submitted by Rwagasore, Grange asked that Rwagasore participate in an examination under oath, which he participated in. Grange then requested an expert review of Rwagasore’s medical records. After it received the results of the peer review of the records, the Grange requested that the court order Rwagasore to appear for a medical examination.
Grange argued that Rwagasore called his physical condition into question and that a real dispute surrounded whether the alleged significant injuries arose from the minor motor vehicle accident.
It observed that Rwagasore had an extensive medical history of pre-existing problems with his right knee; that he had been involved in four previous motor vehicle accidents in a short period of time; that his alleged injuries appeared inconsistent with the nature of the October 2020 motor vehicle accident; and that a peer review of his records showed that a review of the records alone was insufficient to determine the cause of the alleged injuries or the necessity of the care and treatment provided.
After a hearing, the court found that Grange had shown good cause to justify a physical examination pursuant to the statute and ordered the examination.
THE APPEAL
Rwagasore argued that the circuit court erred in ordering him to submit to a physical examination because Grange failed to show that it had used less intrusive means to evaluate his claim and failed to show that a physical examination was warranted. But the statute expressly allows an insurer to require an injured party to submit to a medical examination, it cannot compel the examination without a showing of “good cause.”
DISCUSSION
Good Cause is more than just a suspicion that the insured’s care was unnecessary or unreasonable. The insurer must provide some evidence that it took steps to determine the validity or extent of the insured’s injuries that were less intrusive than an unsolicited medical examination.
In this case, Grange used several measures to evaluate Rwagasore’s claim before requesting that the court compel him to submit to a physical examination. Grange set forth specific reasons supporting its suspicions regarding the nature of Rwagasore’s treatment and care and explained to the trial court how the physical examination could be expected to address its suspicions as to the cause of his alleged injuries. After his review of the available medical records, the insurer’s expert Dr. Tell the Grange to:
the only objective way in which this patient can be evaluated is with a hands-on physical examination with functional testing. A simple medical record review, without examining the patient, would fail to adequately identify pathology and need for treatment. We were unable to adequately determine the reason for the lack of treatment, the necessity of 30 physical therapy visits, and whether any treatment was provided secondary to the effects of the motor vehicle accident. Therefore, an independent medical evaluation with functional capacity testing should be performed to adequately assess this patient’s injuries.
The Court of Appeals concluded that Grange amply explained the basis for its doubts as to the nature of Rwagasore’s alleged injuries and cited evidence sufficient to call into question causation. Additionally, as noted above, an expert review of the insured’s medical records by an independent medical expert may be sufficient to establish good cause for a physical examination.
Under the circumstances of this case, Grange satisfied its burden of showing good cause.
The Court of Appeal found that the trial court did not err in ordering Rwagasore to submit to the medical examination sought by Grange.
Kentucky statutes permit insurers, upon a showing of good cause, to compel a creditor to submit to an IME. Based on the facts of the case: (1) a minor, low-impact collision; (2) a history of multiple injury claims due to automobile accidents; and (3) a review of medical records by a physician who concluded that it was impossible to evaluate the alleged injuries without the claimant’s physical presence, the court ordered the IME. An IME is an important tool for detecting and/or defeating fraud attempts by people who over-treat alleged injuries. The state should consider simplifying the process because the cost of a motion and then a response to an appeal can exceed the full value of the claim.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
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Barry Zalma, Esq., CFE, now limits his practice to serving as an insurance consultant specializing in insurance coverage, insurance claims management, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims attorney and more than 54 years in the insurance industry. He can be reached at http://www.zalma.com and zalma@zalma.com
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